Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CBRE Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 12.8% to 6.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 86, DPO 50, DIO 60). At a 7.1% WACC with mid-year discounting, the terminal value (99% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 22.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $179.57 per share, suggesting CBRE is undervalued by 33.2% at the current price of $134.76.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 2,282 | 2,488 | 2,564 | 2,858 | 3,055 | 3,131 |
| (−) Net Interest | 185 | 202 | 208 | 232 | 248 | 254 |
| (+) D&A | 290 | 327 | 361 | 389 | 426 | 437 |
| EBITDA | 2,756 | 3,017 | 3,133 | 3,478 | 3,729 | 3,822 |
| (−) Tax | 420 | 458 | 472 | 526 | 563 | — |
| (−) CapEx | 395 | 431 | 444 | 495 | 529 | — |
| (−) ΔWC | 6,076 | 1,069 | 392 | 1,517 | 1,018 | — |
| Free Cash Flow (FCF) | -4,135 | 1,059 | 1,825 | 940 | 1,619 | — |
| Peers' EBITDA Multiple | 22.7x | |||||
| Terminal Value | 86,873 | |||||
| WACC / Discount Rate | 7.08% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -3,996 | 956 | 1,538 | 740 | 1,190 | 61,713 |
| Enterprise Value | 62,142 | |||||
| Projection Period | 429 | 0.7% | ||||
| Terminal Value | 61,713 | 99.3% | ||||
| (−) Current Net Debt | 8,127 | |||||
| Equity Value | 54,015 | |||||
| (÷) Outstanding Shares | 301M | |||||
| Fair Price | $180 | +33.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 18.7x | 20.7x | 22.7x | 24.7x | 26.7x |
|---|---|---|---|---|---|
| 5.1% | $161 | $181 | $201 | $220 | $240 |
| 6.1% | $152 | $171 | $190 | $209 | $228 |
| 7.1% | $143 | $162 | $180 | $198 | $216 |
| 8.1% | $135 | $153 | $170 | $187 | $204 |
| 9.1% | $128 | $144 | $161 | $177 | $194 |
Current price: $134.76. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.